Report of budget deficit heats things up for Winter Games organizers

While it might be somewhat difficult to believe the next Olympic Winter Games
are only 15 months away, it is comparatively easy to believe that financial shortfalls
now are forecast for the 2006 Games in the Italian Alps.

Even as Olympic officials were fretting about Athens during the countdown to last
August, sources inside the Olympic marketing world were whispering that the International
Olympic Committee also was worried about tepid corporate and public support of
Turin 2006.

While it finally came to light last week that Turin’s Games face a nearly
$230 million budget deficit, it was never a mystery that the organizing committee’s
roster of principal sponsors has been at four and holding — along with 11
second-tier sponsors — for years, and that sales of licensed merchandise
started later than past Games and were lagging. Plus, three years ago the IOC
discouraged the committee, TOROC, from hiring an outside sales agent to help solicit
corporate deals.

The news about the deficit came on the heels of a second visit in as many years
to the office of Italian Premier Silvio Berlusconi by IOC President Jacques Rogge
in which Rogge expressed concern about Italian indifference toward 2006. Berlusconi’s
response is a reminder of why the IOC loves Games in countries where the federal
government foots the organizational bill (a la Games outside of the United States).

He appointed Culture Minister Mario Pescante to be the government’s IOC liaison
and, according to a source familiar with the meeting, assured Rogge the deficit
would be covered.

The head of TOROC, Valentino Castellani, has threatened to quit, and it’s
not just Olympic politics that play into the equation. Castellani is a left winger,
and Berlusconi’s government rules from farther to the right.

WHAT’S
IN STORE: A U.S. Olympic Committee representative disputed a published report
that the organization is entering into partnership with Denver-based XP Retail
to open and operate as many as 50 branded U.S. Olympic Shops, rolling out from
2005 to 2009. The report by BrandWeek was called premature.

The Olympic Spirit Store at the Mall of America will now be the U.S. Olympic Store.

An XP Cos. executive, managing member Tripp Wall, declined to comment on specific
details about the reported venture.

The USOC confirmed, however, that it has renamed five Olympic Spirit Stores
as U.S. Olympic Stores to be consistent with its similarly named online retail
venture. Four of the five stores are on the grounds of Olympic training centers
— one in Colorado Springs, Colo.; one in Chula Vista, Calif.; and two in
Lake Placid, N.Y. A fifth store, which is operated with XP Retail, opened last
summer at the Mall of America outside Minneapolis.

CEREAL
KILLER: International Gymnastics Federation (FIG) President Bruno Grandi
was re-elected late last month, a day after U.S. gymnast Paul Hamm was allowed
to keep his contested Olympic gold medal after the Court of Arbitration for
Sport threw out an appeal motion filed by a South Korean gymnast who competed
against Hamm in Athens.

Turns out Grandi’s Aug. 27 letter in which FIG formally asked Hamm to yield
his gold medal after a judging error — discovered too late by South Korea’s
delegation — likely cost Hamm a chance to be featured on a Wheaties box
as it placed the legitimacy of his Olympic all-around title into question.

A Wheaties deal, according to an industry sources, can be worth as much as $50,000
when combined with appearances. Hamm’s agent, Sheryl Shade, said the Wheaties
box cover offer was withdrawn amid the torrent of controversy set off by Grandi’s
widely criticized letter.

Now that the dust has settled, Shade said her client’s perseverance and
upbeat comments as he awaited his fate have not been ignored.

“People think he held himself up in a classy way,” she said, although
“it is too early to tell” whether Hamm will ever realize the financial
reward from speaking and product endorsement he might have enjoyed without the
controversy around the Athens judging.

His best opportunities are likely to be speaking engagements, she said. Current
offers include several from Japanese companies.

FOOT
NOTES: A new concept sure to be monitored closely by sponsors of major sports
properties is the just launched FIFA Interactive World Cup, perhaps the ultimate
marriage of a sport to youth-targeted technologies. Registered players from
every continent are competing in the virtual Cup, which features EA Sports’
FIFA Soccer 2005 video game and gaming consoles by Microsoft’s Xbox. Some
participants will compete online via Xbox Live. Players advancing out of qualifying
rounds will earn trips to FIFA headquarters in Zurich for the chance to compete
amid enormous fanfare for the title of FIFA Interactive World Player 2004. The
title will be awarded Dec. 20 in conjunction with the organization’s annual
gala honoring the sport’s on-field world player of the year. The Interactive
World Cup raises the possibility in the future that virtual events will have
broader impact on youth audiences and, thus, brand awareness of the sponsors
of such events, than real-life tournaments such as the actual World Cup. …
A four-league, 36-team Iraqi Football Association was restored in Iraq in late
October ahead of the completed reconstruction of an IFA headquarters building,
a project funded by FIFA. A main soccer stadium in Baghdad should be restored
to the point of accepting spectators by the end of November, fifa.com reports.
… New York-based Soccer United Marketing — the marketing offshoot
of Major League Soccer — is partnering with the governing body behind soccer’s
biannual Gold Cup, a tournament showcasing the top teams from North America,
Central America and the Caribbean. The July 2005 Gold Cup is hosted by the United
States, although sites have yet to be revealed. SUM will handle marketing and
promotion. The acquisition of Gold Cup rights is one of the first deals following
the arrival of executive vice president Kathy Carter last summer from Anschutz
Entertainment Group. SUM also owns U.S. television and advertising rights to
the 2006 FIFA World Cup.